Sensex jumps to 18500, Nifty above 5600 as govt notifies FDI

The BSE Sensex jumped over 150 points to reclaim the 18,500 mark while the broader Nifty bounced back above the key 5,600 mark Friday. The strong gains came on the back of positive global cues and the government's notification allowing foreign investment in multi-brand retail, aviation, and broadcast on Thursday. The rupee, too, saw gains and traded at 54.14 to the dollar.

The government implemented its reforms decisions taken last week despite widespread political opposition, which has sent a positive signal to markets.

"There is no need to press the panic button as far as the domestic polity is concern... Markets may rise to 5,650 or 5,900 on account of global liquidity," Mehraboon Irani of Nirmal Bang Securities told NDTV Profit.

Strong buying was seen in aviation and retail stocks. Debt laden Kingfisher Airlines surged 4.5 per cent while SpiceJet traded with over 3 per cent gains. Pantaloon Retail shares jumped nearly 8 per cent.

All groups of stocks traded higher. Banks, realty, and capital goods stocks jumped over 1 per cent. On the Nifty, 42 of the 50 stocks traded higher.

Reliance Infra was the top Nifty gainer, up 2.4 per cent. PSU lender Punjab National Bank advanced 2.3 per cent. Heavy equipment maker BHEL and private lender Axis Bank were the other stocks to rise over 2 per cent on the Nifty.

Private steel maker JSPL declined 1 per cent after global brokerage CLSA downgraded the stock to "sell".

Global cues:

Assets from Asian shares to oil to gold rose and the euro steadied as stimulus measures from major central banks continued to buoy investor confidence, offsetting weak economic data. The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent after slipping to its lowest in nearly a week on Thursday. Tokyo's Nikkei stock average added 0.6 percent.


(With inputs from Thomson Reuters)

Sensex, Nifty set for big rally on Fed decision, reform hopes

The BSE Sensex is likely to open with strong gains and the 50-share Nifty is all set to clear the 5,550 mark Friday on the back of a global rally triggered by the US Federal Reserve decision to launch a third round of quantitative easing.

The Fed said it would buy $40 billion of mortgage securities a month until the US economy improves. Fed's decision would lead to a rise in liquidity in the global economy giving a push to riskier assets like equities and commodities. The central bank also extended its pledge of super-low short-term interest rates into 2015, and extended a program to drive down long-term rates.

The Nifty, which is already trading at a seven-month high, is likely to jump over 100 points or 2 per cent according to futures trade on the Singapore index. The government's decision to hike diesel prices will also cheer markets. Investors have been concerned over the rising subsidy bill because state-run oil refiners have been selling fuel at below market prices. Oil marketing companies were losing Rs. 550 crore everyday on under-recoveries as a result of higher crude prices in the global markets.

The government hopes the move will help avert a sovereign credit downgrade, the prime minister's chief economic advisor, C. Rangarajan, said. "The government has shown it can take hard decisions, very difficult decisions."

The cabinet's economic panel is due to meet on Friday to discuss a plan to invite foreign airlines to invest in domestic carriers and a proposal to sell shares of large state-run firms. A Cabinet note - a copy of which has been accessed by NDTV - says that under the FDI proposal, foreign airlines will be allowed to invest in Indian peers, but can only hold up to a 49 per cent stake. Although a 49 per cent stake gives the investors minority shareholder control, they will get the right to block a special resolution.

Global markets:

US markets staged a huge rally Thursday after investors got the aggressive economic help they wanted from the Federal Reserve. The Dow Jones industrial average spiked more than 200 points and cleared 13,500 for the first time since the beginning of the Great Recession. The average is within 625 points of its all-time high.

Asian shares rose to a four-month high on Friday after the U.S. Federal Reserve announced an aggressive new stimulus to drive job creation in the U.S. economy.

The Fed's move will likely accelerate the risk-positive momentum at work since the European Central Bank's bond-buying scheme to get borrowing costs down for euro zone members was approved by Germany's constitutional court.

Japan's Nikkei stock average opened up 1.1 percent.


(With inputs from agencies)

Sensex gains 88 points in early trade

The BSE benchmark Sensex recovered by over 88 points in early trade today after yesterday's losses on emergence of buying by funds and retailers, tracking a firming trend in Asian markets.

The 30-share barometer, which had lost 70.99 points in the previous session, recovered by 88.47 points, or 0.50 per cent, to 17,745.68.

All sectoral indices trading in the positive zone with gains of up to 0.97 per cent.

Similarly, the wide-based National Stock Exchange index Nifty was up 19.95 points, or 0.37 per cent, at 5,382.90.

Brokers said fresh buying by funds and retail investors amid a firming trend in Asian bourses in line with overnight gains on Wall Street and European markets after comments from German Chancellor Angela Merkel reasserting her desire to save the eurozone, mainly influenced the trading sentiment.

In Asian region, Hong Kong's Hang Seng index rose by 0.53 per cent, while Japan's nikkei index by 0.63 per cent in opening trade.

The US Dow Jones industrial average index ended 0.65 per cent higher in yesterday's trade.